Orion Beer Co., Ltd. is a major Japanese beer manufacturer based in Okinawa Prefecture. In addition to beer, the company also sells alcoholic beverages such as chuhai, miscellaneous goods, and apparel products. In 2020, when the company decided to focus on its EC business, it asked us for support. We spoke in detail with Mr. Kamifu, Director of the Marketing Headquarters, and Mr. Kobashigawa, Marketing Communications/EC Department, EC Division, to learn more about the company's activities over the past three years.
Focus on EC business
──What was the situation like when you first decided to focus on the e-commerce business?At the time, Orion Beer's sales were almost entirely within Okinawa Prefecture, so the company decided to fully implement e-commerce as a new channel to increase sales outside of Okinawa, and the project began in 2020.
In fact, before we started our business with Commerce Media (as of 2019), we already had an e-commerce website, but it was an old e-commerce site that mainly accepted bank transfers, handled only three products, and was a small service with only a few dozen orders per month.
--At that time, were there any obstacles to strengthening your EC business?An EC team was formed at the same time as the start of the EC project, but since there was no logistics infrastructure and no one who understood EC systems or digital marketing, the plan from the beginning was to set up an in-house system while working with a partner company with the know-how.
In my previous job, I was in charge of the e-commerce business alone, and I built operations with partners and ran the e-commerce business, so I had a clear image of what it would be like from the beginning.
At the time, we had done some research ourselves and concluded that Shopify was the best cart to choose for a start with no resources, so we decided to choose a partner from the Shopify Experts company.
--There were several Shopify experts at the time, but why did you decide to contact us?At the time, there were several people and companies talking about Shopify, and many of them were talking about platform concepts and trends, but I had the impression that Izawa was talking about down-to-earth business, and that was a big influence on me. He had experience running an e-commerce site himself, and based on that, he chose Shopify, so I thought he was trustworthy.
In addition, while Shopify's case studies at the time often focused on D2C, Commerce Media had a strong track record of supporting general distribution manufacturers such as GoGo Curry, and also provided operational services and consulting for malls such as Amazon and Rakuten Ichiba. As such, their ability to provide all-round support for the EC market was a key point.
This wide range of services, which other partners did not offer, was the deciding factor for us to start working with them.
Start of EC business
--What kind of military strength did you initially envision for the EC?Our goals were very big even back then, so we had planned to expand into malls and do regular mail order sales from the start. However, because malls require us to balance with existing distributors, retailers, and business partners, we first planned to set up operations and renovate our own website, and gradually add site functions and sales channels.
In addition, beer manufacturers usually release limited edition and new products periodically to stimulate the market and generate sales, but at the time Orion Beer did not release many such products. However, at the same time as the start of EC, Orion Beer decided to release various products every month, so it was a good timing for EC and PR.
──After that, the site opened on July 5th, 2020 (Nago Day) and the e-commerce business got fully underway, but how was it after the opening?We were relieved that the construction of the website went smoothly without any particular issues. In addition, they also introduced an OMS, connected it to the logistics warehouse, and automated order processing almost entirely, so it was very helpful to have the system in place to allow us to operate smartly with minimal resources.
As a manufacturer like ours, our internal systems are not geared towards e-commerce, so it takes time to coordinate with other companies. We were able to leave the construction of the website and operations to Commerce Media, which allowed us to focus on coordinating our internal operations, which was very helpful.
Also, when we first started, we only had 30 SKUs, but as new products and purchased items increased in number, it would have been time-consuming to create product pages and special features, but thanks to Commerce Media, we were able to create a system where if we prepared the materials, they would create proper product pages for us. They were able to respond even under a tight schedule, and we didn't lose any sales opportunities, which contributed significantly to our sales.
--When was the subscription mail order feature that was part of your concept implemented?We started regular mail order sales about two months after opening. Commerce Media had explained to us that at the time, Shopify wasn't good at subscriptions, and we understood that, but we had Commerce Media set up and adjust the application, and set up the warehouse operations, with the content changing every month in a subscription format.
At the time, we only had overseas applications available, so we used them by process of elimination, but now we have switched to Japanese applications. Commerce Media also made the system changes for us.
EC mall opening
--Could you tell us about the opening of the mall after that?About six months after the launch of our own website, when operations had stabilized, we opened a store on Rakuten Ichiba. We received advice from Commerce Media on which mall to open our store in, and after considering the market size, compatibility with our products, and the influence of existing distribution, we decided that our first mall would be Rakuten Ichiba.
We were also interested in Amazon, but there was a possibility that we might have to compete with liquor stores for carts, so we decided to wait until we had more products and could guarantee that it would not affect existing distribution, and decided not to open a store there at this time.
We were able to outsource all aspects of opening a Rakuten Market store to Commerce Media, including store construction, design, initial setup, and connection to the OMS, which was great as it saved us the trouble of having to communicate with another construction company all over again.
──How did you feel about opening a store on Rakuten Market?Orion Beer's own e-commerce site attracts Orion Beer fans, so the company knows what products will sell, but the mall attracts a casual demographic of customers who are aware of the products and brand but have never purchased from them, or who only buy occasionally.
In this market where we are compared to other brands, it was an extremely difficult problem to figure out how to get people to notice Orion Beer's products and buy them.
It was easy to imagine that horizontal expansion of our own e-commerce site would not work, so here too we worked together with Commerce Media to come up with a strategy, introducing a steady stream of products that would fit in the mall, through repeated trial and error.
Also, even if we had the products, we had trouble initially securing good advertising space due to issues with sales records at the mall. However, after the product we launched in collaboration with Commerce Media for the first Father's Day became a hit, we were able to steadily secure space.
In May, when the Father's Day gift shopping battle was fierce, we ranked first in Rakuten Market's daily real-time rankings in the beer and spirits category, and also won the SHOP OF THE MONTH for May 2023.
──What do you think of the current management of Rakuten Market?
At present, we are fortunate to have a large number of repeat customers and are able to generate sales from new and limited edition products, but we would still like to offer special products for important sales occasions for beer manufacturers, such as Father's Day and year-end gift-giving.
Rakuten Ichiba has a wide variety of advertisements, including performance-based advertisements such as RPP and Coupon Advance, and display-based advertisements such as marketplace slots. We are grateful that Commerce Media can help us adjust the annual budget, select advertising slots, create creative content, and manage submission schedules, giving us the time to focus on the products and customers that we need to focus on.
In addition, seasonal products must be delivered on the same day, so sensitive and complex operations are required from stocking to shipping. Commerce Media also cooperates with us in this regard, and gives us very detailed advice on the backstage side, such as calculating the necessary inventory and instructing on the number of assemblies, so we are able to operate without incident.
Rather than simply telling us to have a lot of inventory, they understood the speed and capacity of our logistics operations and gave us specific support, such as asking us to secure this amount of this product at this timing, which was extremely helpful.
Further expansion of sales channels
--What priorities were given to opening new malls after that?As they established their systems, they opened stores in order of market size, starting with Yahoo! Shopping six months after Rakuten Ichiba, followed by auPay Market and D Shopping about a year later. After a few months of adjustments, Amazon followed.
As with Rakuten, we asked Commerce Media to handle store construction, design, and initial settings when we opened, so we believe we were able to cover the market in a fairly short span of time.
For other malls as well, we asked Commerce Media to handle basic operations, sale planning and management, and advertising management, but at the time Yahoo! Shopping also had PayPay Mall, and combined with the fact that it was in the investment phase from the parent company, we were able to achieve the initial sales target we set for Yahoo! Shopping early on.
──What did you think was the difference from Rakuten Market?Recently, Yahoo! Shopping, auPay Market, and D Shopping have a very strong carrier influence, and their campaigns seem to be a bit unique. Therefore, it is difficult to increase the top line just by expanding Rakuten Ichiba horizontally, and it is necessary to set prices and time sales and campaigns to match the mall.
We are also responsible for managing the schedule of campaigns for each mall, as well as planning, schedule management, and execution of what initiatives will be implemented at which mall and when, so the whole team works together to balance the expansion into other sales channels.
Current situation after expanding into other sales channels
──What is different about your current e-commerce business compared to the past?Although we have been adjusting the balance of our sales promotion resources, our sales ratio between our own company (regular/single item) and the mall is currently about 4:4:2, and all sales are growing steadily. Many manufacturers in other food categories tend to place a larger emphasis on the mall, but we have been able to focus on our own company while also operating the mall properly.
The mall currently operates around 100 SKUs, but the company's own e-commerce site has grown to around 500 SKUs, nearly 20 times the number since it first opened, so the site has grown considerably.
The range and number of products that can be viewed on a smartphone screen is limited, but we feel that Commerce Media has done a good job creating the site despite the large number of products available.
In addition, collaboration products with other brands that were not planned when we first opened have also sold quite well, which has been a pleasant surprise. We were a little hesitant the first time, but the products sold out immediately, and the next year we had five times as much stock, and the year after that we doubled it again, so the response has been getting bigger and bigger.
Collaborations are a measure to boost sales in the short term, so inventory management and shipping operations can be very difficult, but with the advice of Commerce Media, we have been able to ship products smoothly every year without any major incidents.
It is extremely demanding to open stores in so many malls while also running our own e-commerce site, so we are truly grateful for having a partner like them.
The direction of the EC business
--What are your expectations for Commerce Media in the future, and what are your goals for your company?Orion Beer wants to stick to "enjoying Okinawa" in the way that it does. Therefore, we are already working on not only selling beer, but also introducing and making available for purchase high-quality products from Okinawa that are known only to those in the know on the Orion Beer website.
However, souvenir shop items can now be purchased on various EC sites, so we plan to sell Okinawa's specialty products. In this way, we hope to spread the word about the good things about Okinawa and its products through Orion Beer.
Commerce Media has provided us with the most comprehensive support possible, so we hope to maintain the current level of service while also taking on new challenges together.
I would also like Commerce Media to play a role in promoting to the world small local manufacturers that have good products, as well as local manufacturers that are not yet well known.
I am really pleased that Commerce Media understands our customers and is able to come up with projects and product suggestions that make people want to drink Okinawan beer even while in the city, and I would like them to offer this to businesses in various other regions as well.
As the growth of the EC market slows from now on, I hope that EC will continue to spread new discoveries and encounters, and the joy of finding products that are not normally available at convenience stores or supermarkets.
